Mike Rowehl: This is Mobility

The news is starting to make it out about the analytics product AdMob has in beta. Like mentioned before, analytics on mobile is one of those things it’s easy to do poorly and very difficult to do well. Even the folks who have been paying attention to the environment for a long time don’t have clear cut answers about how to deal with thorny issues like carrier identification and user counting. I was hoping that the MMA would get out in front of the crowd on this one and drive some consensus, but that wasn’t to be. So of course I’m happy to see AdMob attempting to bring some sanity to the field. They’re certainly some of the most well positioned to deal with the global issues off-deck publishers have in understanding their mobile audience.

I haven’t been using the service actively for my sites (the main one I would think about using it on would be Mowser, which is ummm.. headed in a different direction these days), but I have sat down with the system and poked through it using other folks data. In my opinion one of the most important set of stats is around number of users over time and how long they stay. How many users do I have in a day? How many of them are returning users vs. new users? What are the “front door” areas of my site that drive new users, and how often do those users visit other areas? Stuff that AdMob has thought through both from the publisher and advertiser perspective and is well represented.

The area I’m most curious about is the device capability breakdown. Custom iPhone sites are relatively common because of the marketing and discussion that goes around that particular device. But I’m not sure that anyone has ever really exposed the additional device segmentation for the off-deck folks. Of the folks that are looking at device breakdown many that I talk to see Nokia N-series devices as the extreme front runners in terms of their total number of pageviews. While the browsers in those devices don’t have the same emotional impact that using Safari on the iPhone does the first time, I do think the devices are successfully driving mobile web usage. Will exposing some of the additional info about devices drive additional middle web style site development? It’s a question not just of device penetration and capability, but of developer mind-share and impact of user interface. There’s a real ecosystem around the iPhone, go to developer events and people are “dabbling in iPhone development”. No one is “dabbling in N-series development.” This is why I’m still an engineer by trade, I just don’t understand how Apple manages to do these things. Much respect.

Stepping up a level however, I would have really liked there to be some public consensus around how to count users and identify uniques - with compliant products following on. But one of the principles I’ve come to understand recently is that it’s easier to build something that works and let standardization form around existing practice than it is to try to drive unity from diverse groups through committee discussion. I’m hoping that what happens is that the practices that AdMob has put into place will drive behavior like the content adaption manifesto Luca put together helped to identify destructive behavior across the environment and correct it. There’s certainly the mass there to make an impact.

I’m getting a bunch of pings from all sorts of advertising folks (probably because I’ve worked in the past at places like Overture and AdMob, worked in mobile for a while, and my current company is in the process of getting sold off). First of all let me say there’s nothing out there that I’m interested in on that end. Not least of all because I’m still involved with AdMob and there would be some nasty conflict of interest stuff going on if I were even talking to competing ad networks. But primarily because there seems to be almost as much cluelessness in this round of media expansion as there was in the last. I was working for a company doing primarily banner advertising around 1998, so that’s my basis for comparison - and we all know how that turned out. Allow me to elaborate on “cluelessness” a bit if I may.

I think the current round of confusion is being driven primarily by the amazingly high value that Facebook is commanding and the mistaken belief that that value is associated with the information that Facebook has about their users and the corresponding margin that supposedly translates to with advertisers. Just untrue top to bottom. Take this advertisement which has been darkening the valuable rightmost column of my Facebook pages for nigh on 6 months now:

If they were really paying that much attention to media rotation and customer profiling and advertiser fill they would have way more interesting stuff to put in there for me. None of this is to say that Facebook isn’t worth their enormous valuation, just that I don’t think that user data and advertising is the reason for it.

However the outcome of stuff like this, and other commentary floating around about mobile devices being able to provide the ultimate in personalized media (because they’re always on, always connected, one-person devices loaded with a wealth of information about their user) is that folks link that “the more I know about my users the more valuable I am as a media property.” That’s an awfully dangerous generalization. To see why allow me enumerate the basic models of advertising and how they relate advertisers (just the basics, there are enough shades of gray in there already):

• CPM - which stands for cost per mille, or cost per thousand impressions. Not cost per million, like everyone would assume. Which is the first bit of evidence that lots of advertising is based on some rather twisted and introverted opaque set of dogma if even the base terminology starts off confusing. If you’re running CPM stuff someone is paying you some set amount of money for every thousand times you show their ad. When advertisers are paying you for CPM advertising they love to know information about the people they’re advertising to, so knowing a lot about your users will help here - IF (and this is a big big IF) you have enough users displaying any given trait to make it worthwhile for the advertiser to buy against. The first part is easy: “I know I have 15 people in Kentucky who like to wear red shoes when they go line dancing.” The second part is hard, who gives a crap about that trait? Do they care enough to try to reach 15 people? Are they willing to pay you enough to reach them that it’s worth your while? See all the questions that come out of this? You’ve got to think these things through before you say “the more we know about our customers the more we can make in advertising,” cause for the most part you’re wrong.
• CPC - which stands for cost per click, just like you would expect it to. Whew. Advertisers running CPM ads eventually said “this is stupid, why do I pay you to show stuff as if I were advertising on a billboard, when this whole Internet thing is supposed to be about interactivity and measurement?” Thus was born CPC, where your advertisers pay you every time someone clicks on one of their ads. Hmmm. So how do you use all that information you have about customers here? Well you can ask your advertisers to fill out a bunch of info about who they think would respond best to their ads and to describe their services and offerings. But ultimately most advertisers don’t care, if they’re only paying when someone clicks they really don’t need to do your job for you. So when you’re selling CPC your customer information is useful TO YOU the property owner, but only when combined with the knowledge and algorithms to optimize the inventory you have (and a deep network of advertisers).
• CPA - and we’re back to slippery terminology, CPA stands for something like cost per action, or cost per acquisition. Advertisers again said “hey, why am I paying someone to drive clicks to some random webpage when what I really want is to sell widgets?” and thus was born the concept of CPA, where you as a property owner get paid once one of your users goes somewhere else and performs some desired action. Once again, like CPC the advertiser no longer really cares about demographics and user info. Hell, they care even less now. If the user is going to buy something on the advertiser site, great. The advertiser normally doesn’t care if the person is in Palo Alto or Pakistan (barring weapons classification of strong crypto of course, but that’s a different story).

See, as you climb up the scale of advertiser value the burden of using all that customer information shifts from the advertiser to the property owner. The game starts to come down to automated systems of optimization and segmentation and having enough inventory and fill to be able to shift values around in search of optimal methods for running the property. The inventory number requirements and complexity of response optimization really make this stuff best suited to a network of advertisers and properties working in unison - which is why Google and AdMob are doing so well. It’s a hard nut to crack for all but the largest media companies, and even they tend to bank as much on the demographic skew of their audience as deep information about their users (and still only directly rep part of their inventory frequently and backfill with general networks or piggyback on external sales). So being part of a network is the best way to make sure you have access to advertisers and the kinds of algorithms that drive pageview value, but it also restricts how you can use all that information you have about your users. Does not compute.

Right now I’m just not buying the overall pitch for much of the expansion of mobile advertising. Much of it seems like technologists building systems for their own sake without paying much attention to how the whole thing fits into the overall market - or even what the real desires of advertisers are. All these little niche networks keep popping up all over the place, trying to substitute depth of information about users for reach. That doesn’t work. You’ve got to have reach first, no matter how much information you have about your users, doesn’t matter. And you want user info, sure. That helps you more effectively manage the inventory you have and maximize yield, but it doesn’t drive the cost to the advertisers.

If you’re building a company planning to make money through advertising you can not count on depth of user information to allow you to command a premium unless you have a corresponding plan to reach large groups of motivated advertisers with a pressing need to reach exactly your users. When you talk to folks and they ask “so who are your users?” that’s the reason they’re asking. As technologists we tend to think the answer “Everyone! Anyone can sign up and use it” would be the natural answer all should be happy with. Definitely not.

Now, all of that being said, does that mean that all this jazz about always-on connected mobile devices being the way to the future of media is just a load of crap? No. Just that it’s going to take a model shift for that kind of customization and leverage of information to make it out to mass use. Someone or something is going to have to change advertisers minds about the fundamental way to interact with their potential customers and engage with an audience. We’ve been talking about that for a decade with the web already, and every few months we discover the next great new game changer. Over and over. And for reasons like that if you step back and look at the total number of dollars spent on advertising, the amount of adverting spend going into online vs offline is still pretty small.

So that’s it, you can stop calling me about mobile advertising networks now.

Russ and I have worked on stuff together in the past. One of the interesting side effects of online celebrity (or whatever you want to call it that Russ has, blog popularity, name recognition - the term itself isn’t important) is that whenever we work on something together it’s not “Russ and Mike”s whatever, it’s Russ’s whatever. It’s happened a few times, and we even named it “The MoMo Effect” after Mobile Monday, which is where it first seemed to happen. Normally I don’t care about it much, as long as I can get done what I want to I’m happy to ride on Russ’s popularity. With the collapse of Mowser I’m actually happy to see that it’s written up all over the place as “Russ Beattie’s Mowser.” At least I don’t have my name directly associated with that flame out in most people’s minds.

However something happened out of this that I wasn’t thinking about at all. I’ve spent the last 3 months tapping everyone I could to get a chance to talk to angels and VCs to see if we could find some funding. Obviously we didn’t. However, the “is the mobile web dead” conversation that got kicked off has caused issues for some of the folks who helped me out who were also currently looking for funding. I’ve had a few calls that went something like: “What the hell? I introduced you to a bunch of folks, and you guys turned right around and screwed us! People are starting to wonder now if they should put their money in the mobile web.”

Interesting, after not being able to get money out of anyone for Mowser, which I was working on with Russ - I’m interested to hear that anyone’s investment policy would be impacted by a post that Russ put up. I would be surprised if even the secondary conversation that came out of it impacted anyone. So just something to keep in mind for the other folks out there. Just because when you go and sit down with a group of folks to discuss what you’re doing and have it dismissed, that doesn’t mean those folks aren’t going to turn right around and use your commentary against friends and partners. Watch your back, sometimes the problems come from the places you least expect them to.

The reaction to Russ’s post about shutting down Mowser and his thoughts on the mobile web have me in a bit of a tizzy. Russ is a good friend, and I understand where his thoughts are coming from, so I’m not going to attack him. I would however like to bitch at the rest of the Internet for being unthinking sheep on the whole.

The reaction to Russ’s post seems to be “Oh god no! The mobile internet is dead!” For one of the folks who was a vocal advocate of the web on small devices to say that developing for low end devices is a waste of time, well then the whole game must be over and everyone should pack up their tents and go home. Come on! Here’s an example of something I like to call “independent thought”, all of you out there might like to try this exercise on your own.

First is to try to extract some core points from the stuff that’s laid down in the post. Try to draw some boundaries around what exactly it is that seems to be the issue with Mowser. First of all we were aimed at lower capability devices, the average handset you find in pockets from San Francisco to Mumbai. That meant we weren’t doing anything special for higher capability devices like the iPhone or recent N and E series Nokia devices. While that increases the audience you can address, it also takes a lot of the whiz-bang WOW factor out of the initial user experience for the power users. It also means that we were positioned against the current market movement, which sees more and more high capability devices out there. Does that mean that a content adaption service would never be able to survive in the world of high capability handsets? NO! It just means that two guys working out of their homes and trying to cover all aspects of the business weren’t able to come up with a method that covered high capability devices with a pleasant experience and served low capability devices adequately.

As far as the fact that many of the requests through Mowser were porn related, that’s not a unique issue, and certainly not “a problem”. Carrier networks try to filter out porn and restrict what people can do. Give them an open system and they’re going to go out looking for what they want. And if they want hot girl on girl action, hell, that’s what we serve up. Takeaway for that is that there’s huge potential in adult mobile content still, not all the business models have been explored there apparently. Does that means that “everyone browsing the mobile web” is a pervert? No, it doesn’t mean that at all. Does it mean that the only stuff you can put on the mobile web and get an audience is adult content? No. But it means that given the methods we used to grow organic traffic we got a lot more adult related searches than other terms. You can draw no other conclusions from it, and to do otherwise would be stupid.

Third is the monetization. Making significant scratch from a mobile website run as a media company is still pretty hard. The availability of mobile advertising networks has lowered the bar quite a bit. But not enough so that an adaption engine with monetization on interstitial pages and throwoff traffic on a directory of links is a no-brainer. We had too few methods of monetization build into Mowser, too few “advertising positions per pageview”, and hadn’t made it over the traffic hump where trying to represent any subsection of our property as a higher value media buy could have increased our margins. Because we did have lots of traffic from places like India and South Africa, which are less hotly contested in the advertising networks, much of the advertising we had a relatively low payout per thousand impressions (eCPM in the biz). We didn’t have a good mechanism for profiting off that traffic more directly, though I’m sure the right person would be able to find a way to make that work.

Finally there’s the team. Two guys who have been around mobile for years, very familiar with the web and current trends in online services, and well connected to the existing ecosystem. But also not sales and business development geniuses. A lot of this stuff fell to me, and I sent out a bunch of emails and called up the folks I was able to call up to pitch the idea. Some of them signed on, which was great. Mostly they were existing mobile publishers interested in linking out to resources on the web. But I wasn’t able to land any big online content networks. Lighting up About.com for instance with a mobile version for all their pages, or Wordpress.com. Getting integrated to mobilize outbound links from Facebook mobile, or MySpace, or LinkedIn. Someone with a better background than me might have been able to make those kinds of deals. Would it have changed everything? I’m not sure, but it’s an area of execution we failed at which could have shifted the balance. Should we have dumped the consumer focused side of things and instead sold transcoding as a service charged per thousand requests through the adaption engine? Should we have been looking to license this thing right off the bat? There were other methods we didn’t explore at all.

So take that all together and try to draw some conclusions out of it. Here are a few that pop to mind:

• If low capability devices are shrinking in overall market share it’s going to take more than minimal content stripping to make a compelling mobile experience. You should be planning for iPhone style devices to become more the normal and also figure out what needs to be done to service them. That means you probably need more than one engineer working on the problem, and should be looking at folks with traditional web experience in addition to those who know the details of mobile specific markup or you’ll paint yourself into a corner.
• You can’t represent a general adaption network as a premium property unless you find a way to segment. You can’t segment until you have a lot of traffic. Either try to grow in niches, starting in areas where you know you can monetize well and have models other than general network fill available. Or plan to run at a loss for a while and have a strong model for growth you can measure, and make sure you have control over it. “Google sends us traffic” does not count, especially in mobile. They can be sending you 100 thousand searches one day, and 10k the next. That’s their right as a search provider, they’re tuning as they learn as well. You need to have direct control over a majority of your traffic if your traffic is the way you make money.
• Selling the idea of making a mobile version to someone making money off web advertising is a very hard sell. They see small incremental revenue and a lot of technical complexity. Selling the idea of a free service that allows an existing mobile site owner to link to additional content, especially if they can profit from those links - that’s much easier. But even given that I wasn’t able to walk into LinkedIn and say “Hey, I have a great service for your mobile site that would allow you to include the links from the web profile pages in the mobile profile pages as well” and make that sale. I’m sure there are thousands of people who could. If you’re going to do those kinds of things, find those people early on. That means you have to be able to pick a strategy and commit to it.

See, look at that. Concrete helpful points instead of sensationalist hand waving. This was fun, thank you for joining me. I recommend trying this method of “thinking” whenever you can. Right now I’m going back to growing the mobile ecosystem wherever I can.

I was mulling some of the geo hacks for the N810 that are out there now. Maemo Mapper is a great open source mapping application, there’s a little app that geocodes photos as well. Then there’s Maemo WordPy for posting to Wordpress, and I was wondering if that allowed for geocoding posts. And I was pondering the user of the N810 as a geocontent production device. As well as wondering if the geoaware primitives we could use in mobile browsers would at all be helped by the evolving state of mobile Firefox.

All the little hacks on the N810 could really be solved more easily on the web if there were a way to hook the stuff together. What I started thinking about was hacking around with the new firefox release and see if I could get it to shove geoinfo into the outgoing headers. But then I realized most of the stuff I wanted to fool around with wouldn’t take the headers in anyway. So for now instead I made just a simple little python launcher app that pulls your current location from the GPS and launches a browser with Google Maps pointed at your current location. Very simple, but I imagine with some basic URL crafting you can use it to create geocoded Wordpress posts or geotag images uploaded to flickr. Maybe I can make it a little homescreen applet to display your location and launch one of a number of sites with your location fed in.

Thinking about the way the web facing geographic services have worked out, passing a URL with the location filled in seems to make more sense right now. There was a geo-headers ietf draft floating around at one point.. but I can’t find that as an official version. Are there services out there that use it? Or something else that’s common across services?

There are a few interesting things going on with “carrier networks” on the whole that have had me wondering about how folks at the carriers/operators can be so painfully dense. There’s the problem with Sprint deploying a proxy transcoder and expecting folks to get whitelisted to not be adapted instead of using standards, stunningly similar to the Vodafone issue which has already been replicated with TeliaSonera. And I have an issue that hits more close to home, my startup company Mowser is apparently subject to some access restrictions on the 3 network in the UK which apparently do not apply to Google or Yahoo.

The common response to issues on these network is that standards be written up to specify the behavior so that carriers stop doing it. I’m going to have to cry bullshit on that one. While listening to a talk by Tim Bray from Rubycon I learned there’s a document up describing the overall architecture of the world wide web. How convenient.

A quick look through the document shows where carrier networks already diverge from published recommendations. For instance take a look at the very first section after the introduction:

In order to communicate internally, a community agrees (to a reasonable extent) on a set of terms and their meanings. One goal of the Web, since its inception, has been to build a global community in which any party can share information with any other party. To achieve this goal, the Web makes use of a single global identification system: the URI. URIs are a cornerstone of Web architecture, providing identification that is common across the Web. The global scope of URIs promotes large-scale “network effects”: the value of an identifier increases the more it is used consistently.

Well when you whitelist and blacklist sites at the network level guess what you’re doing? You’re segmenting the URI namespace based on your access network. Depending on where you are and how you’re accessing the network you might or might not be able to access a resource. And when a transcoding layer is introduced for all requests through a network independent of source link structure, you’re having the network make a decision to change the semantics of a URI, selectively mapping a whole chunk of URIs to other resources. Leaving aside the whole other issue of the general Internet principle of the intelligence for any given set of protocols being at the edge of the network instead of the core, this also conflicts with the overall principle of consistent global identification.

We’ve already had decades to understand and refine the proper functioning of the Internet, and there’s already a tremendous body of work laying down and describing how to replicate and interact with it. But carrier networks continue to break the most basic and fundamental principles when there seem to be obvious and simple alternatives to get to the same goals. I strongly doubt that yet another standard will do anything to help.

Almost all of the Mobile Web docs out of the W3C that I see reference the base W3C architecture description base document like the one I was just looking at. Yet still they go ahead and define something like “in network adaption” when talking about best practices. Best practices on the Internet say that no application decisions should be applied between the two communicating endpoints. Full stop. It’s just incorrect behavior.

Unfortunately nothing really seems to be affecting these folk’s decisions to do things that are disruptive, limiting, and destructive to the long term environment. You can always vote with your feet though. If I were on Sprint I would switch off their service, same thing definitely for 3. It normally only takes a few people switching off and giving the reason of “I can’t access the web sites I want the way I want” for their customer relationship systems to form the correlation and realize it’s an actual problem. I’ll help maintain a list of carriers not to use if you care about the mobile web also, cause people might be more likely to form their decision going into a purchase rather than after they already have things up and running. So here’s my list of carrier not to get service from if you care about the mobile web:

• Vodafone UK and Portugal
• 3 UK
• Sprint

If there are others let me know in the comments.

Thanks to Russell for pointing out that a new set of MMA guidelines is up for review. Apparently I’m supposed to post feedback in their public forums, but I’m getting a bit tired of having to follow discussions in other places. So I’m posting my feedback in my public forum, just like they posted their recommendation on their site. Just seems proper.

As soon as I read Russell’s post I thought “Yay! Finally some structure around an accepted practice for audience measurement on the mobile web!” Cause any effort to democratize serving ads in a medium and put everyone on equal footing just needs to set down conditions of input (media styles and formats, standardize terms and minimum specification of a buy) and expected output (what should be reported and how should it be measured?) The guidelines as they stand make a point of dealing with the media formats and sizes, not bad, I have no real comments there. However, the mobile web part says nothing at all about audience measurement. Which is kind of conspicuous cause the messaging and downloaded app sections do talk about metrics and reporting.

It’s almost like it was intentionally left out, hoping no one would notice the smoking crater? I’m looking for something along the lines of the IAB Campaign Measurement guidelines. Look at the detail in there: delivery mechanisms and which inclusion tags count as which style and dealing with caching. And most important, it doesn’t matter if it’s right or wrong in every case, just that it’s consistent. Why is there information about handset screen sizes in China, and no mention of how to measure reach on the mobile web? Bad form.

Okay, I know I said the report included sections on application download and messaging audience measurement. Technically that’s true, in that their presence in the report calls into attention their absence for the mobile web section. But these are the counting and reporting “guidelines” for mobile messaging:

Operators could use counting tools that use digital fingerprinting or similar technologies to track message
distribution among users in the network. This could enable the service provider to track the dissemination
routes, to identify social leaders, and to reward users for forwarding messages. However, all these
capabilities must comply with existing national level regulatory and legal frameworks covering privacy and
the use of personal data. In addition end users concerns and expectations will always need to be
carefully managed. Taking all steps necessary to ensure end customers fully understand any proposal to
user their data, together with providing a clear choice to opt in or out of this type of service is essential for
its long term success.

Umm. I’m not sure “The carriers might do something to help count users. And oh yea, be sure not to break the law” really counts as a guideline. That’s not helpful at all, to anyone.

Then there’s the section on mobile video, which says pretty much “we’ve got no guidelines, but here’s some info about mobile video.” What the hell? Are these guidelines for usage? Or marketing material? If you don’t have guidelines for mobile video don’t include a section on mobile video in your guidelines. It’s reminiscent of padding out a book report. Was there a minimum word count for this assignment? I actually scrolled back to the top of the document and checked the title of the report again, thinking that maybe this was really just an informational release. The mobile marketing strategic overview and not a set of guidelines. But that’s what the report says, “MMA Global Mobile Advertising Guidelines”.

So lets create a specification for them so we don’t have to go through the process again. Audience numbers must be counted using the MSISDN if available and fall back on cookie based counting in all other cases. MSISDN presence is dictated by the presence of one of the following headers in a request from a mobile terminal:

• X-MSISDN
• X-NOKIA-MSISDN
• X-UP-SUBNO
• X-WAP-MSISDN
• X-UP-CALLING-LINE-ID
• USER-IDENTITY-FORWARD-MSISDN
• X-WAP-CLIENTID

It’s relatively easy to pick out which headers to use if folks publish some info about the traffic they’re getting. Cookies must be delivered with the domain of the central advertising network if appropriate, which means image based recording even for text adverts. 1×1 gif, which admittedly carriers could block.

That’s it, that’s a spec, it’s the kind of thing I would expect the MMA to put in their “guidelines”. Furthermore, given their position as the premier global organization pulling membership from carriers, software providers, and manufacturers I would expect them to:

• quantify in what percentage of cases the guidelines are expected to yield valid numbers given global averages
• work to improve the guidelines to decrease the error rate over time
• provide recommendations and guidelines to carriers, software providers, and device manufacturers to decrease the error rate going forward

If something like that happened we might have something that could “stimulate the growth of mobile marketing and its associated technologies.” As it stands now however, I don’t really see the point. It clarifies a few points if you already have an advertising business up and running. But say you’re an independent site owner looking to sell your own inventory directly, or an open source advertising platform looking to add mobile adverting to the mix of features your package provides. Read through the guidelines with that perspective in mind and it’s obvious it doesn’t provide any of the necessary clarity at all.

I did a search this morning to see if there was anything related to the cookie issue with Openwave software. Instead I found a post from Dennis saying that it appears that Sprint has now followed Vodafone in disrupting the mobile web. Ouch. And their partner in crime? Openwave. I was hoping to find some positive reaction, instead I find a new mention of negative behavior. Damn.

Great post from the Mippin folks explaining a problem with cookies on mobile devices, in the US in particular. I’ve heard support numbers all over the place from folks. Some say cookies fail 50% of the time, others say they work in all but 5% of the cases. Apparently there’s some major issues with using a bare TLD with Openwave (either browsers, gateways, or browsers and gateways - see this Openwave FAQ for some info about how they’ve mucked up identifiers). Good info to know.

If this is a browser plus gateway issue it would be nice to see it get fixed. If this is a browser issue that can’t be fixed I think we all need to make sure to continue giving Openwave folks the evil eye when you see them (I’m assuming you all do already, just keep it up). Come on Openwave! This is your chance to prove to us all you’re not completely useless. I’ll be keeping an eye out for major network changes.

The second part of a series of mobile payments posts I’m making to get ready for BarCampBankSF later on this month. The first part was a problem overview for the issues. This part is about the Fear Uncertainty and Doubt (FUD) that stand in the way of trying to get a global system going for moving money around.

I was going to hold off on this topic for a while, but then I ran across this gem of a report from our beloved US government explaining why mobile payments could destroy the world. The whole topic area right here just strikes me as backward, small minded, and at it’s base just really stupid. Here we have the potential for a fantastic system, uncoupling the concept of money from bits of paper and metal. Making it easy for people to do what they want with their money when they want. Being able to reach out and help friends and relatives in far away places instantly.

But instead of seeing the potential upside (not, potential upside, most of us don’t have the ability to do the things discussed in that report under the current set of services), instead what’s called out is the potential for abuse by a very small percentage of the population. I just don’t get that mentality at all. It’s like not allowing cars because people could get drunk and drive around in them. Or declaring that everyone has to walk around naked cause someone could hide weapons under their clothes. It’s just absurd. Why cripple everyone because you’re concerned about the behavior of a few? Apparently all you have to do is include the word “terrorism” and you can propose just about anything you want.

I personally don’t buy it at all. If you want to cut off the potential use of a system by terrorism, sure, by all means! I’m not going to stand in your way. But if you want to cripple a system that dictates what I can do with my money, how I can do it, and when I can do it, well then we have a bit of an issue. If you want to cut off terrorism do things that affect terrorists and money launderers. Inconveniencing everyone in order to do so is just lazy thinking. Unfortunately people have strong and irrational feelings about things like this cause they feel their safety is threatened (Surprise! You never really had safety, you’ve just become more aware of not having it), and any bit of absolutist thinking they can hold on to in order to make them feel better. Well darnit, that’s just going to have to do. Cutting off terrorism by cutting off their funding is one of those areas (Surprise! That’s not going to work either, probably won’t even slow it down).

Unfortunately what we’re working at here, at heart, is a fundamental change in the way people think about money. And like any major change, that really makes people nervous. Especially people who have a vested interest in the particular limitations, controls, and structures brought about by the incidental effects of the current system. People like governments and banks, who unfortunately are holding most of the cards in this game. In order to figure out a workable system we either need to work around the folks who would normally stand in our way, or convert them to our side. Most of the efforts that have come before are based around a third option of giving incentive to the existing folks and caving in to their restrictions. I don’t consider that option to be on the table, limiting a new system to make the players in the old system happy isn’t a path to progress in my opinion.

Converting the existing folks to our side seems like it could be pretty difficult. Hard to say though with the setup the way it is in mobile payments. With the carrier sitting in the middle of every significant transaction we might be able to play the banks against the carriers to come up with a system that works at scale to break open that market for the banks. But the banks have their own sets of issues. Working completely around the existing system might be the real option we have. Direct user to user payments with something only vaguely resembling a bank in the middle. Using alternative “payment” methods like trading prepaid minutes or prepaid messages. That gives us a bit of a foothold, but how does the regulation and legal arena look for schemes like that? For instance can I take $25 from someone in CA and at their request provide it to someone in NY for withdrawl? What needs to be reported and recorded in that case, and what base restrictions are there? If someone has good pointers please share them.